The Obama Administration will soon release its Fiscal Year (FY) 2012 budget request. This request comes as Congress is still debating the FY 2011 budget and the Department of Defense (DoD), along with other the rest of the federal government, is operating under a continuing resolution at FY 2010 funding levels. Despite the delays in getting an FY 2011 defense budget in place, work on the FY 2012 budget is proceeding. On January 6, 2011, Secretary Gates held a press conference announcing the results of his initiative to identify efficiency savings in the defense budget and the topline figures for the FY 2012 budget request. According to these early numbers, real growth in the base defense budget will slow in FY 2012 and stop altogether in FY 2015. This backgrounder addresses the current state of the FY 2011 defense budget, identifies insights stemming from Secretary Gates’ announcement on the FY 2012 budget, and raises budgetary and programmatic issues likely to complicate DoD’s planning over the Future Year Defense Program (FYDP).